Who is known as a franchisee?

A franchisee is the individual or entity that purchases the rights to operate a franchise from the franchisor, who is the original creator of the franchise concept. This means that the franchisee has the authority to use the franchise’s established brand, business model, and support systems in their own local market, while paying fees or royalties to the franchisor.

Understanding the role of a franchisee is crucial in the context of business education, as it highlights the dynamics of franchising as a business model. Franchisees invest in the opportunity to run a business with a recognized brand, which can lead to a higher chance of success compared to starting an independent venture from scratch. Their investment typically comes with training and marketing support provided by the franchisor, making the franchise system attractive for many entrepreneurs.

Other choices, while related to the concept of franchising, do not define the term 'franchisee.' Specifically, the person who creates a franchise refers to the franchisor, and the customer of a franchise is merely a consumer, not directly involved in the business operations. A legal advisor may assist in legal aspects related to franchising but does not have the rights or responsibilities of a franchisee.